UK pension plans concerned about how to invest in a volatile, late cycle environment may want to consider two practices: continue effective rebalancing and don’t postpone further duration hedging in anticipation of rising rates.
Using our 2019 Long-Term Capital Markets Assumptions and our estimate of the average current pension profile, we projected forward the buyout position of the average UK pension scheme.
In the wake of the Global Financial Crisis, all eyes are on dynamic, responsive funding strategies that can deliver long-term goals in a risk-aware way.
Reaching for yield, which we define as buying bonds with wider spreads after controlling for sector and rating impacts, is a topic that frequently arises in the life insurance industry.
Despite the Swiss National Bank (SNB) continued to characterise the Swiss franc as highly valued, we suggest that any overvaluation may be illusory.
Pension funds don’t face the many constraints that make buy and maintain strategies so well-suited to insurers, and can make use of these freedoms when designing portfolios to meet the liability-aware investment needs of pension funds.
Caught our eye: UK pension buy and maintain strategies could bring demand pressure to sterling corporate bonds
In an already tightly held market for sterling corporate bonds, even modest moves by UK pension funds to adopt buy and maintain strategies could create stiff competition for these assets.